Cogeco Inc.’s cable division has struck a deal to buy a major independent cloud infrastructure provider that would significantly expand its data centre offerings.

The company said Friday it has offered to buy all the shares of Vancouver-based Peer 1 Network Enterprises Inc. for about $635 million, a 32 per cent premium over Peer 1’s share price. It hopes shareholders will approve the deal Jan. 29.

Montreal-based Cogeco has locked up Peer 1’s board, management and some key shareholders who have a combined 62 per cent of the shares, it said in a statement.
If the deal goes through Cogeco’s data centre revenues would go up from $100 million a year to $260 million a year, CEO Louis Audet said in an interview. Cogeco already has 6 data centres in Canada with a total of 100,000 square feet and plans to build a 100,000 sq. ft. data centre in Montreal to open in spring 2014.
The addition of Peer 1 would give it another 19 data centres and 21 points of presence in North America and Europe with some 10,000 customers. It offers managed hosting, co-location and cloud services.
Audet said Cogeco wants Peer 1 “because it’s a fantastic platform that opens for us markets in the United States and Europe. And they have great knowledge about small and medium-sized customers and managed hosting. Cogeco Data Services has more expertise in co-location with large and upper medium-sized clients, so they’re perfectly complimentary to each other.”
Data centre services are a key strategic focus for the company, he added.
“Cogeco Cable is a well positioned telecommunications company in Canada and its commitment to invest growth capital in the internet infrastructure business, and demonstrated success in serving the technology needs of enterprises makes it an ideal match for PEER 1,” Peer 1 CEO Fabio Banducci said in a statement. “Both of our companies strive for exceptional customer service and technological excellence. Cogeco Cable’s Offer is attractive to our shareholders and recognizes the value and potential of our company, management and employees.”

The statement also said Peer 1’s board unanimously approved the offer and recommends shareholders do the same.

Peer 1 will likely be folded into Cogeco Data Services, a division of Cogeco Cable.

Cable and telecom companies, which have significant data centres of their own, are finding offering data services to organizations are a profitable way of branching out of their core businesses.

In 2008 Cogeco took a big step forward in data services when it bought Toronto Hydro Telecon. Last year it bought Queittouch Inc., a Toronto managed services firm with data centres in that city and Vancouver, as well as Montreal’s MTO Telecom Inc.
Cogeco buys Quiettouch  

Toronto Hydro Telecom bought by Cogeco

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